Richard M. Nixon, the thirty-seventh president,1969-1974 arrived in office in controversy and left in more. He also added 200 billion to the debt.

1968 Nat.Dem.Conv.The mayor of Chicago was publicly rebuked for "excessive" force. Organizers were charged with 'conspiracy to overthrow the govt.' and tried as the Chicago 7.

In 3 months 145,000 tons of bomb fell on Cambodia a nation of 10 million, killing 4 million, at a cost of $150.5 million (hist.) Laos $99.2

Gerald Ford, the thirty-eighth president, Republican, 1974-1977

Jimmy Carter, the thirty-ninth president, Democrat, 1977-1981

Here is a graph showing the national debt as measured against GDP(subject of next hub.) As you can see our story is about to take a turn for the worse. The debt tops one trillion in 1981.

Ronald Reagan, the fortieth president, Republican, 1981-1989, elected on a platform of reduction of government and non-interference in the economy. Result: the debt is increased by $1.8 trillion.

Colonel Oliver North: scapegoat of the Contra/Iran affair - proceeds from arm sales to Iran diverted to Contras. North later convicted. Reagan cleared of any involvement.

"Mr. Gorbachev, tear down this wall!"

George H. Bush, the forty-first president, Republican, 1989--1993 added another $1.5 trillion to the debt over four years.

The Persian Gulf War Aug/90-Feb/91 resulted after Iraq invaded Kuwait. Retreating Iraqi forces set fire to oil wells. Cost of this war was $US 60 billion, but $40 billion paid by Saudi Arabia

Bill Clinton, the forty-second president, Democrat, 1993-2001, was the first to pay down principle on the debt in decades. Still the national debt increased by $1.3 trillion.

George W. Bush, the forty-third president, Republican, 2001-2009 added $6 trillion to the national debt.

The terrorist attacks of September 11, 2001 killed over two thousand Americans, including hundreds of police and fire fighters, as well as causing massive destruction to Manhattan, and debilitating illnesses to rescue workers.

Americans killed in Iraq: 4,356, in Afghanistan: 932, official number of wounded: 31,582. Cost to date in Iraq: $500 billion, Afghanistan: $197 billion.

Barak Obama, the forty-third president, Democrat. In eleven months he has increased the debt by $1.4 trillion, but appears to be the popular scapegoat for the public for all that went before.

In the beginning 1776-1800

(a million is defined as one thousand thousand)

“But with respect to future debt; would it not be wise and just for that nation to declare in the constitution they are forming that neither the legislature, nor the nation itself can validly contract more debt, than they may pay within their own age, or within the term of 19 years.” – Thomas Jefferson

“No pecuniary consideration is more urgent, than the regular redemption and discharge of the public debt: on none can delay be more injurious, or an economy of time more valuable.” -- George Washington

1783 – A peace treaty ends the Revolutionary War.

1788 – Constitution ratified. What were the thoughts of the leaders of the day on debt?

“Avoiding likewise the accumulation of debt, not only by shunning occasions of expense, but by vigorous exertions in time of peace to discharge the debts which unavoidable wars have occasioned, not ungenerously throwing upon posterity the burthen which rightfully is ours.” --George Washington

“Funding I consider as limited, rightfully, to a redemption of the debt within the lives of a majority of the generation contracting it; every generation coming equally, to the free possession of the earth he made for their subsistence, unincumbered by their predecessors, who, like them, were but tenants for life.” -- Thomas Jefferson

1791 - The fledgling United States has had public debt since its inception, and debts incurred to pay the cost of the Revolutionary War, including $191,608.81 borrowed from New York Banks under the Article of Confederation to meet the governments first payroll, led to the first fiscal report of the National Debt on January 1, 1791 and the sum was $75,463,476.52 (some exact accounting here – right down to the pennies.) The population of the U.S. was 3,929,214, giving a per capita rate of debt of $19.205 (hist) – a staggering debt load for the young nation.

"So low and hopeless are the finances of the United States, that, the year before last Congress was obliged to borrow money even, to pay the interest of the principal which we had borrowed before. This wretched resource of turning interest into principal, is the most humiliating and disgraceful measure that a nation could take, and approximates with rapidity to absolute ruin..." -- William Richardson Davie

The optimism of youth and time of growth 1803-1850

1803 – Oct 1803 - In his message to Congress in October, 1803, President Jefferson announced that the Louisiana Purchase would add nearly $13,000,000 to the national debt, most of which would be payable after fifteen years; before which time the existing national debt would be retired. Yet so diligent was the nation in paying debts, this massive increase only upped the total public debt to $80,727,120.88.

1812-1814 – The war of 1812-1814 required further expenditures, and yet under President James Madison, the national debt increased only to $99,833,00.15. This President was renowned for his parsimony, and distrust of bankers. In spite of his frugality, when he left office in 1817 the debt had reached $123,491,905.16, to be settled by a population of 9,638,453 or a per capita burden of $12,812.41.

“History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling the money and its issuance.” --- James Madison, (1751-1836), Father of the Constitution for the USA, 4th US President 1809-1817

When President Andrew Jackson (1829-1837) entered the White House, the national debt, which had reached $124 million following the War of 1812, had already been reduced to $48 million. To get it to zero he was perfectly willing to forego anything not “direly necessary.” One Kentucky congressman, after a trip to the White House to beg Jackson to sign one such bill, reported to his allies that "nothing less than a voice from Heaven would prevent the old man from vetoing the Bill, and [I doubt] whether that would!"

At the end of 1834, Jackson reported in the State of the Union message that the country would be debt free as of Jan. 1, 1835, with a Treasury balance of $440,000. Government revenues that year would be twice expenses. He sat down to dinner that night, after writing the following in a letter to a friend.

"How gratifying the effect of presenting to the world the sublime spectacle of a Republic of more than 12 million happy people, in the 54th year of her existence . . free from debt and with all . . . [her] immense resources unfettered!"

“I am one of those who do not believe that a national debt is a national blessing, but rather a curse to a republic; inasmuch as it is calculated to raise around the administration a moneyed aristocracy dangerous to the liberties of the country.” -- Andrew Jackson, (President, 1809-1817)

It didn't last long, to be sure. The great prosperity of the early 1830s broke in the summer of 1836 when a bubble in land speculation, fueled by easy credit, abruptly ended. (Does this not sound depressingly familiar?)

“Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves.” – Andrew Jackson, President 1809-1817

The end of Jackson’s presidency ushered in a recession (or contraction as it was known then) that lasted six years. One Wall Street type of the time said, “The fortunes we made so much about in the days of speculation, have melted like the snow before the sun.” Federal revenues fell by half and the national debt was back to stay –- forever.

Research into copies of old newspaper articles, editorials and pamphlets from the period show a tremendous concern over the fiscal performance of the Van Buren administration, who now incorporated a national debt as policy. This stood (1842) at $13,594,480.73, to be serviced by a population of 17,063,353 or a per person burden of $.79. And for this debt, the journalists and pundits of the day crucified the man. (One wonders what they’d think of the mess we’re in today.) Of course, the previous year 1841, the debt had stood at $5,250,875.54, so perhaps they did object to 200+% increase in one year.

Over the next decade, a time of rapid expansion and growth into the west, the war for Texas, the building of great railroads, the national debt declined, in spite of this spending. By 1850 it was $63,452,773.55, and the population 23,191,876.

Young adulthood and conflict 1860-1929

(a billion is one thousand million)

In 1860, the national debt was $64,842,287.88 in a country of 31,443,321 inhabitants -- a fiscally healthy, nation. However, that was about to change – irrevocably. Abraham Lincoln was sworn in as President in 1861, and the southern states organized into the Confederacy. The national debt at July 31, 1861 had jumped to $90,580,873.72. On the same date in 1863, the year of Lincoln’s Emancipation proclamation, the public was now liable for $1,119,772,138.63 and the Civil War, (or War Between the States as some say it should be called) is eating money faster than it can be found.

By the end of the war in 1865, the national debt was now $2,680,647,809.74 (July 31, 1866) and Lincoln was assassinated.

“The government should create, issue, and circulate all the currency and credits needed to satisfy the spending power of the government and the buying power of consumers. By adoption of these principles, the taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity.” – Abraham Lincoln

Andrew Johnson became the seventeenth president (1865-1869) and added another $7,200,000 to the debt when he authorized the purchase of Alaska in 1867.The program of "Reconstruction" (more like destruction according to southerners I've spoken with) also chewed away government funds. When he left office in 1869, the debt sat at $2,588,452,213.94

For the next fifteen years, while the nation concentrated on expansion and organization, the debt remained reasonably static, and the new century dawned on a nation of 76,212,168 persons with public obligations of $1,617,372,419.53 or a per capita debt of $21.22. (1900)

The twentieth century’s first decade was known as the golden age, at time of affluence for many, elegance for those who could afford it, and the emergence of new methods of manufacture.

All this came to an abrupt end with WWI in 1914 (although America did not enter the conflict until 1917, and stayed to the end of the conflict in 1918.) However, American industry geared up to supply those forces actively involved in the war.

This is reflect in the sudden jumps in the debt from $ 3,609,244,262.16 in 1916 to $14,592,161,414.00 in 1918 and $27,390,113,120 in 1919. The population in 1920 was 106,021,537 ( ratio of $26 per person – tough!)

The 1920’s roared in, and America was in a party mood. A time of affluence followed the war, and great wealth accumulated to the upper classes, fortunes made in speculation, a gambling philosophy which drove stocks upwards with little concrete basis -- until the stock market collapse of 1929. The national debt sat at $16,931,088,484.10.

The Volstead Act, ushering in Prohibition, resulted in speakeasies, bath-tub gin, an illicit trade in alcohol creating new millionaires on both sides of the border with Canada, gangsters and a reduction in government revenues with the loss of taxes on alcoholic beverages, and an increase in expenses (new laws require new compliance officers.)

The third decade saw a dramatic change in philosophy when it came to economics and government.

Before the Great Depression, balancing the budget and paying down the debt were considered second only to the defense of the country as an obligation of the federal government. Before 1930, the government ran surpluses in two years out of three. In 1865, the vast debt run up in the Civil War amounted to about 30% of GDP; by 1916 it was less than a tenth of that.

Maturity and a change in values (1930-1980)

What was this change? Up to the 1930’s, the government believed in a free market, with no government involvement, a laissez-faire (leave it alone) approach to the economy.

This hands off policy changed during the 1930’s to a belief that government can take actions during changing economic conditions that may alleviate the adverse effect of a downturn, thus avoiding worker lay-offs and unsold goods building up. These theories were collected and organized by the British economist, Keynes. http://en.wikipedi/wiki/Keynesian_economics (In case anyone’s curious to know more.) Among these theories is government’s new favorite – deficit spending. Here is a link to an excellent explanation of these theories http://www.u-s-history.com/pages/h1982.html

An understanding of this change in policy and thinking is important to explain the change in government actions and expenditures. Beginning in the 1930’s, in response to the dire difficulties of the Great Depression, the government injected money into the economy as a stimulus. (And yes, even FDR referred to it as a stimulus, so today’s administration did not invent the word.)

Franklin Delano Roosevelt took office in 1933, just four short years after the crash of ‘29, and the nation was already deep into the depression. His initial response and attempted stimulus involved his public works programs such as hydro dams (named after his predecessor, Hoover)

“Blessed are the young, for they shall inherit the national debt”--Herbert Hoover, President, 1929-1933

1935 saw the implementation of Social Security and the burgeoning of the government offices and government workers (an almost 200% increase) and the public debt climbed slowly upward, from $16,185,309,831.43 in 1930 to $40,439,532,411.11 in 1939.

Detractors of his actions say his forays into deficit spending might have assisted had he not been so timid. Although, one can certainly understand his reluctance to spend money not in the national coffers – had he injected huge amounts of capital without economic improvement, the nation would be very much worse off. He gave up the attempt in 1937 and the economy took a steep nose dive.

FDR went into office with a national debt for 1933 of $22,538,672,560 and in 1941 at the beginning of his second term, the debt rose to $42,967,531,037.

“The real truth of the matter is, as you and I know, that a financial element in the large centers has owned the government of the U.S. since the days of Andrew Jackson. History depicts Andrew Jackson as the last truly honorable and incorruptible American president.” -- Franklin D. Roosevelt, President 1905-1909)

Germany invaded Poland in 1939, and by December of 1941 (following Pearl Harbor) the U.S. was at war. War may have lifted the nation out of the doldrums of the depression years, but it was expensive. U.S. industrial might produced much of the equipment and machinery required by the total Allied forces, (Britain's industry having been targeted for destruction by German bombing raids during the Blitz. The lend/lease policies put in place to finance this surge in production left huge debts on the devastated British economy, much of it forgiven and never recouped. The debt of 1941 $42,967,531,037.00 grew to a massive $258,682,187,409.00 by the war’s end in 1945 (per capita rate of $1,819.59 for the 142,164,569 Americans) and H. Truman became president.

Returning American troops found this wartime industrial surge ready and waiting for peacetime applications. The United States became the world's greatest manufacturing nation, and the country, despite the financial effects of the war, entered a time of prosperity.

The Truman years saw the end of the Second World War, the completion and success of the Manhattan Project, the rebuilding of former foes through the Marshall Plan, and two years of the Korean War, and yet despite this massive spending, his administration was able to reduce the national debt, albeit slightly. President Truman took office in 1945 with a national debt of $258,682,187,409.93 and left office following his second term in 1952 leaving a debt of $259,105,178,785.43.

As though the world had not enough of war, "along came Korea."

The Korean conflict of 1950 to 1953 cost the U.S. $30 billion (historical dollars), or expressed in today’s dollars, $320 billion. During the last 18 months of the Truman administration, the US defense budget had quadrupled; and Eisenhower resolved to reduce military spending by brandishing the United States' nuclear superiority while continuing to fight the Cold War effectively.

In 1953, Dwight D. Eisenhower was sworn in as President. His administration is best remembered for the plan and commencement of the Interstate system, for the desegregation of schools, for the arms race of the cold war, and as one source informs me, for ordering the slaughter of squirrels wreaking havoc on the White House lawn. His first term began with a national debt of $275,168,120,129.39 and his second term ended in 1960 at $290,216,815,241.68, an increase of $15,048,695,112.00 or .05%, the rate considered “acceptable” for inflation. For each of the 189,323,031 residents of the country, this amounted to $1,532 per individual.

Although a life-long soldier, he had strong views on the economic waste of war, and spoke often on the follies of an economy based on arms:

"Every gun that is made, every warship launched, every rocket fired signifies, in the final sense,a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children...This is not a way of life at all, in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron." --Dwight D. Eisenhower

America had a love affair with her new President, John F. Kennedy, and his inauguration in 1961 was believed to herald the beginning of a new age for the country, however his short presidency was not without challenges. The Cuban missile crisis of 1962 brought the nation to the brink of war, the civil rights movement meant domestic unrest and the space race all conspired to increase the 1963 national debt to $309,346,845,059 a 7% increase.

"Most Americans have no real understanding of the operation of the international money lenders. The accounts of the Federal Reserve System have never been audited. It operates outside of the control of Congress and manipulates the credit of the United States." -- Barry Goldwater (1909-1998) US Senator

Following Kennedy’s assassination L.B. Johnson became president, and the Vietnam War began. Johnson left office in 1969 and the national debt was now $368,225,581,254.41 or $1,726.31 per person.

The Vietnam War cost American taxpayers about $150 billion (historic). Over 2 million men and women served during the war and about 58,000 were killed as a result of the war. Many soldiers came home disabled for life, some lost limbs and some were poisoned by chemicals like Agent Orange. Others returned from the war addicted to drugs and many suffered mental problems as a result of their participation in the war.

The Vietnam War was a very costly war, socially, economically, and politically. Coming out of Vietnam the country suffered financial loss. After President Johnson had spent so much on a war that many considered lost, he offered up no way to pay for the war. In WWII America gained by increased productivity during war time and increased education in post war America. These elements were not present during Vietnam to help boost the American economy. America went into a recession and was effected by many other factors including crisis in the middle east which increased the price of oil greatly.

Richard Nixon took office in 1969, and his presidency was besieged with problems from the beginning. Domestic unrest kept pace with the escalation of the Vietnam war, and the racial struggles of the day. His administration was fraught with controversy: violence against dissenters; the killing of four students at Kent State by the National Guard; the brutality of the police against demonstrators in Chicago; the passing of the War Powers Act in 1973 in response to the Vietnam War in an effort to keep anything like it from happening again -- while escalating the war and secretly bombing Cambodia and Laos (and lying about it) -- which sparked even greater civil disobedience; Watergate and the resulting scandals; and lastly the OPEC cut in oil production.

He responded with a trip to China, opening relations with that country for the first time since the Communist revolution.

He left office an inch from impeachment, and probably the most unpopular president ever (including G. W. Bush.) "I am not a crook," he repeated at resignation.

The public debt as he resigned in 1974 and left office was $469,898,039,554.70, and Gerald Ford assumed the office.

"A billion here, a billion there, sooner or later it adds up to real money." -- Everett Dirksen (1896-1969) U.S. Congressman and Senator

President Ford served for two years and oversaw America’s withdrawal from Vietnam, April 30, 1975. We will never know how much this 10 year active conflict actually cost, or its impact on the national debt, but some of this is reflected in the increase of the debt to $653,544,000,000.00, (even the roundness of these figures brings suspicion as to their veracity) an increase of 183,645,960,446 or 40% over two years.

President J Carter inherits this obligation in 1977, and despite his increases in taxation and reductions in government spending, he leaves office in 1980, and a national debt of $930,210,000,000.00 (whatever happened to the accounting to the penny?) or $3,932.53 for each and every one of the 236,542,199 Americans.

What happened?

During the Carter’s administration the economy was going through some very difficult times. The Federal Reserve Board tightened the money supply and the economy began a recession. Unemployment rate rose to over 10 percent, the highest since World War II.

Oil prices skyrocketed causing high gas prices and in turn resulting in inflation. This may be due in part to the Iranian revolution destabilizing the area. Many will remember the U.S. embassy hostage situation. However this unrest surely highlighted America's dependence on foreign oil. President Carter announced the Carter Doctrine which declared that any interference with US interests in the Persian Gulf would be considered as an attack on US vital interests.

Congress passed a series of laws that removed most of the regulatory shields around aviation, trucking and railroads in an effort to increase competition and lower prices.This coupled with rising fuel prices led to business failures.

Inflation so devastated the economy by the 1980 election that interest rates rose to 20 percent. Ronald Reagan then defeated Carter by a wide margin promoting less government involvement and tax cuts to stimulate the economy.

The spread of the waistline at middle age1980-2009

(a trillion is one million million)

It was 1981 and Ronald Reagan became president, bringing with him a cadre of economic advisors and a new theory called ‘reaganomics’; the cornerstones of which were reduction of taxes, removal of regulations, and non-interference by government. This was supposed to increase investments by the wealthy, which in turn would stimulate jobs and more consumer dollars. He referred to this as “trickle down economics,” that is increase the wealth of the wealthy, and the benefits will eventually reach the working Joe. I’ve heard this also described as, “Whatever falls off my feast table is yours.”

In 1982, Reagan de-regulated the savings and loan industry, which would prove to be ironic later on. He reduced taxes and military spending, but despite his best efforts, and with the stock market crash in 1987, his two terms which started with less than 930 million dollars debt, ended with a national debt of 2.6 trillion dollars in 1988. Or to be exact, $2,602,337,712,041.16, or $10,058.90 per capita for a population of 258,709,873.

"When a conservative says it is bad for the government to spend more than it takes in, he is simply showing the same common sense that tells him to come in out of the rain.” – Ronald Reagan, President 1981-1988

It only got worse.

George H. Bush became president in 1989 and served one term. In 1991 the savings and loan businesses, de-regulated by Reagan collapsed, taking with it the fortunes of millions of Americans, and adding $150 million to the national debt. He also believed in supply side economics, yet increased some taxes in 1992. He left the 1992 national debt at 4 trillion dollars or $4,064,620,655,521.66. This is now $15,711.11 for every man, woman and child in the country.

One might be tempted to consider the cost of the Persian Gulf War as part of the $1.5 trillion to the debt, but of the $60 billion spent, around $40 billion were repaid by Saudi Arabia. The costs of fighting the oil well fires set by the retreating Iraqi troops has apparently never been tabulate.

Bill Clinton took the oval office in 1993, and immediately returned to a balanced budget policy eschewing the theories of his two predecessors and set about reducing the annual deficit with hopes of reducing this debt. He increased taxes and reduced government spending, and by 1998, tax revenues exceeded expenditures. For three consecutive years, President Clinton was able to pay down the principle of the national debt. However, interest accrued faster than the nation can pay, and when he left office in 2000 the national debt sat at 5.7 trillion dollars, or $5,674,209,886,86 or $19,470.00 per capita.

“It took the national debt two hundred years to reach $1 trillion. Supply Side Economics quadrupled the national debt to over $4 trillion in twelve years (1980-1992) under the Republicans. Bill Clinton actually paid down the national debt. How did he do it? He raised taxes. It produced the longest sustained economic expansion in U.S. History” -- ED SCHULTZ, Straight Talk from the Heartland

In 2001, George W. Bush started the first of two terms in office. He returned to supply side policies and cut taxes. The terrorist attacks of 9/11 brought about two wars on two fronts – Iraq and Afghanistan. In the last weeks of his presidency, he approved a $1.4 trillion dollar bail out following the sub-prime lending fiasco.

“President Bush promised that he would "retire nearly $1 trillion in debt over the next four years. ... the largest debt reduction ever achieved by any nation at any time." Greenspan: Adjustments to our Spending Commitments Needed

"The degree of uncertainty about whether future resources will be adequate to meet our current statutory obligations to the coming generations of retirees is daunting.*" Alan Greenspan Feb. 25, 2004

"Listen, government has got plenty of money, and it needs to stay focused and principled. We need to be wise with the taxpayer's money. But it turns out, when you're trying to keep your economy going, the best way to do so is not through government spending, but it's through the spending of thousands of individuals across our economic spectrum. “ -- George W. Bush, Jan. 29, 2004

President George W. Bush left office in Jan 2009, and a national debt of $10.7 trillion dollars, or $10,024,724,896,912.49 (September 30, 2008) or $36,333 per capita and he did issue hundreds of billions of dollars in TARP funds before leaving office.

In January of 2009, Barack Obama was inaugurated as President.

“I found this national debt, doubled, wrapped in a big bow waiting for me as I stepped into the Oval Office. “ -- Barack Obama

In his first eleven months in the office, the national debt has increased to $12,135,510,445,387.63 or $39,466.40 for every American.

But if you're feeling panicky, think back to 1797 and the staggering debt the new nation faced. The problem is, the leaders then considered repayment of the debt a necessity, second to nothing. They knew, even then, that perpetual unpaid debt eats all revenues in interest payments, and when interest goes unpaid, it becomes principle, and therefore compounded. It is this continual compounding of interest that creates debt increase before the government even spends a penny.

Note: All quoted figures on the national debt are from the Treasury Department of the United States.

Updates coming soon

As this article has drawn a large number of readers, I feel it is necessary to update for the years 2009 - 2012. This will be in the form of a separate article linked to this one covering the "Obama years."

Look for The US National Debt -- 236 years in the making: the Obama years, to come very soon.

Comments

No HTML is allowed in comments, but URLs will be hyperlinked. Comments are not for promoting your articles or other sites.

sending

NotFallingForIt 2 years ago

Like musical chairs, the game of printing dollars ends when the dollars are no longer desirable. US debt is exploding at an unsustainable and uncontrollable expontential rate. Just because we can print dollars does not paper over this fact.

The US is like a bankrupt company whose currency/stock is nearly worthless due to the systemic mismanagement of $200T in unfunded liabilities (government pensions, social security trust fund, obamacare, medcare, medicade, etc) that have grown expontentially to the point that no investor believes the company can meet its obligations.

Author

lmmartin 3 years agofrom Alberta and Florida

Thank you, StanfromMarietta, for this information. You've written a hub on this hub and one that contains a lot of good information.

stanfrommarietta 3 years ago

A lot of confusion arises because US Treasury securities and bonds can be used for two purposes. (1) They can be used by the Treasury creating them and selling them to banks at public auction at a discount for the purpose of 'borrowing' money to fund Congressionally authorized government operations not covered by tax revenues. The securities are IOU's with a maturity date when they attain full face value which the government must pay to any holder of them on demand. (2) Instead of using the securities to borrow money for funding government operations, the securities can be sold to private and foreign investors who have dollars they wish to park in a safe place and earn a little interest on it. These are analogous to bank CD's which correspond to time deposits given the bank to earn interest. The money in the present case from private and foreign investors is just parked in time deposits at the Federal Reserve Bank. The securities are the CD's for these time deposits. This money is not used to fund the government. It is always there either in body or in record, and can easily be returned to the investors along with interest created out of thin air by the Fed. So, this 34% of the national debt is no major problem to repay.

The US government doesn't need to borrow money for its operations from foreigners. It can borrow all it needs from our own banks.

And furthermore, our government cannot borrow money in foreign currency to pay for its operations. So this whole idea that our government is borrowing from foreigners to fund its operations is bogus.

There is one other benefit to the selling of Treasury securities to foreign investors who have gained dollars in selling to us goods and services. It takes those dollars out of circulation.

That means they will not be chasing the same goods and services in our economy at a time when we need to deficit spend (which ultimately ends with the Fed creating new money to buy back the securities used to borrow that deficit money). In that way they cannot cause inflation.

Why might we need to deficit spend? If we are buying imports from China and Japan and Saudi Arabia, that is draining dollars out of our economy. That will cause deflation, recessions and depressions if not counter balanced. The Congress can deficit spend, and deficit spending money will ultimately become debt-free money and correspond to new money, which, if spent on infrastructure, will create demand for goods and services from construction workers

working on the govt. funded infrastructure projects. That will cause businesses to expand to produce more goods, and that expansion will lead to more workers being hired to produce them. As long as the government can keep deficit spending to counterbalance money lost to imports, this need not be inflationary because the dollars are buying real goods from foreigners with it, and the foreigner's prices may stay stable if they are in competition with other producers and have enough raw materials to make the goods.

The point I want to make here is that just looking at the budget from a fiscal point of view of balancing federal spending against tax revenues may be very short sighted.

We need to see the benefit to the economy of balancing the nation's economy in terms of the various flows of money into circulation from government spending and money creation,

exports (getting dollars from foreigners for goods we make),

investment in production of goods and services and the various outflows of money from circulation through imports, savings (retaining money instead of spending it), taxes which take money out of circulation. The desirable mix of inflows to counter outflows should be one that allows for the growth in aggregate saving, avoids serious inflation and deflation, and helps achieve or maintain full employment at stable prices.

stanfrommarietta 3 years ago

Borrowing by the Treasury was required by a law passed in 1917. During the Civil War Lincoln went first to the banks to see if he could get loans to fight the war. They wanted 25% - 36% interest. On advice of a subordinate he said "No thanks! I'll print my own dollars." And he did. They were known as 'greenbacks' because of the color of the ink on their backsides. These were "Treasury Notes", issued directly by the Treasury. This was dollars created out of thin air. Fiat money. But banks did not like greenbacks because they were cut out of the loop of money creation. They lobbied and finally got legislation that prohibited the Treasury from creating the money out of thin air in 1917. After that the Treasury had to borrow from our banks to cover deficits. But the Federal Reserve Bank, a governmental entity, has the power to buy the Treasury securities from banks that got them for lending to Treasury for deficit spending. Fed buys with dollars it creates out of thin air (since 1971 when the dollar was taken off the backing of gold). This was done because foreign nations like France were cashing in their dollars for gold, and there was not enough gold to back the money needed to fight the Viet Nam War, the War on poverty and to develop the Great Society.

When the Fed buys the securities it does not lend the dollars to the banks but buys them outright. That means those dollars it creates do not represent debt (other than the usual debt obligation on all government money that the govt must give anyone presenting a dollar at the Treasury a dollar in return. All money, including mature government securities, carries that debt obligation. The federal government also has to accept your taxes and fines to it in its money.

We happen to be paying off the national debt routinely. Every time the Fed buys a security from a bank with money created out of thin air, it redeems the debt to that bank for money given the govt in return for the security. That's how new money gets into our economy, needed for economic growth, if only to keep up with growing population. Money has no intrinsic value. All it is is tokens or quantitative representations in units of account (e.g. dollars) of obligations between parties in exchanges of goods and services in the economy. It's like in Monopoly, the game. Money is needed to keep track of who owes who what in the game for the various goods and properties on the board. It is a medium of exchange. It does not have to be backed by anything to represent values of things bought and sold. That is determined by negotiations of prices between the parties.

Taxes are not needed by the Federal government to spend. Taxes are not needed to redeem the national debt. The Fed can just create any money needed to buy the securities. It will do this mostly when there is deflation, because then the newly created dollars can enter the economy. Actually, because money is fungible, when the Fed buys securities from the banks, that frees the money the Treasury got from the banks of any debt to the banks in the securities sold to the banks.

That can be counted as new money in the economy, and the Fed's money paid to the banks as just replacing the banks' old money in their reserves.

When the Fed buys securities, it buys with debt-free money. You don't owe someone who buys something from you for

the money you got. When it sells securities to banks to drain their reserves during inflationary times to limit bank lending that creates debt, but the Federal Reserve records the money it got from the banks for the securities. It may or may not destroy the money it got (but not the record of it), but it will always be able to recreate the money when those securities of the banks mature and pay them back with interest (created out of thin air).

The government is not the one who knows best how to spend your money. The people are supposed to know what electors to elect to make those decisions. The House must initiate all spending bills, so Congress makes these decisions. It is Our government, not some foreign entity. Unfortunately for some who are in the minority, what they want in the way of government spending may not be what the majority wants. But that is just democracy for you.

Interest is not a problem. If the Treasury does not have revenues on hand to cover the interest on securities it rolls over, it can always borrow money from the banks by issuing securities for this interest and then the Fed can buy those securities with new money. So, in the end no debt need remain. If the government doesn't do this, it is run by ignorant fools.

I need to add here that the Fed is not the only way to manage the debt. For most of the life of the United States government debt has been rolled over by the government's issuing new securities to swap for mature securities held by banks. This can be done indefinitely, and the Fed can always supply any interest created out of thin air.

urbisoler 3 years ago

stanfrommarietta cannot be correct. It would mean, among other things, that debt is a positive good; that the US from 1791 - mid 1960's (read solvent) was mistaken in not borrowing against the future; that we should increase borrowing exponentially; that paying off the debt is never urgent although paying off the skyrocketing interest on the debt is; that voting in a conservative administration would be a catastrophe to the nation; that increasing taxation is a positive to be embraced by the public; that the government knows best how to spend YOUR money; that BIG government is good government. The Rise and Fall of Nations suggests otherwise.

D vfb bfbdhbfuehsdshjebdeduehfjebfu cgrhcvtexv tbtvf 123 3 years ago

Good info

stanfrommarietta 4 years ago

@urbisoler: If stanfrommarietta is correct, then why is the EU cracking down with drastic austerity measures on Greece and other EU nations? Why can't they operate on "stans" borrow forever and print money forever scheme just like the US, (apparently?), does?

The countries in the Euro zone do not have a central government with their well-being and full-employment as a mandate. They are not sovereign in the creation of money. Unlike our system in which our central bank (the Fed) is mandated to achieve both stable prices and full-employment, the European Central Bank is only mandated to achieve stable prices. There is no central government that can require the Central Bank to create new money and lend or grant it to the countries in the eurozone. All the money has to come from the banks in the respective countries, and these countries cannot create new money. In the US our government can grant money to the states for certain federal purposes. That puts new money into the state economies. Europe will go down the tubes if it does not change its monetary system.

Author

lmmartin 4 years agofrom Alberta and Florida

I can't answer your question urbisoler, though I have my suspicions.

urbisoler 4 years ago

If stanfrommarietta is correct, then why is the EU cracking down with drastic austerity measures on Greece and other EU nations? Why can't they operate on "stans" borrow forever and print money forever scheme just like the US, (apparently?), does?

Author

lmmartin 4 years agofrom Alberta and Florida

Thank you for your input, stanfrommarietta. I think you should publish these comments as your own hub; certainly enough information for one. This hub was never meant to be a treatise on economic theories, merely a look at history of the debt and what was happening at the time. Thanks again for your interest. Lynda

stanfrommarietta 4 years ago

@lmmartin: "But government attempts at managing the economy tend to fail and often make things worse. Why? Because by the time a problem is recognized it is often in the process of self-regulating -- though that fact is overlooked -- and government intervention (notoriously slow and ponderous) brings about unforeseen consequences which often exacerbates the normal ebbs and flows. Not to mention these well-intended but often catastrophic attempts are very costly. There's a wealth of information out there on this issue, so don't rely on my quick explanation."

The logic here is faulty as a critique of Keynes. If politicians had understood and followed Keynes' recommendations, then we might not have had the problems that resulted from implementing Keynesian ideas in a retarded and inadequate manner. Keynes held that there is no such thing as equilibrium of the market. That is a fantasy of the neo-classical school now dominant in the universities. So, you can't avoid trying to adjust disequilibriums merely by assuming you will have equilibrium that will restore everything to a desirable state if everything in the economy is left alone. That was what Volker at the Fed wanted to do by deregulating the banks and other financial institutions. But the neo-economists never paid attention to the private debt sector involving home buying and the disequilibrating hedge funds with derivatives and default swaps and other pure gambling disguised as sophisticated financial instruments. And they didn't even have room for a recession or depression in a deregulated economy in their modeling. Those never happen except as "random shocks". The problem is that neo-classical economists are mathematically challenged, do not learn nonlinear dynamics and so do not have the mathematical tools to model economies in disequilibrium. The Great Recession shows the follies of deregulation, of ignoring private debt, of assuming equilibrium will always occur.

Keynes and the post-Keynesian economists are heterodox now, but they are the more scientific and empirical in their thought and likely will overturn the neo-classical school, maybe not in this generation and this recession, but eventually they will collapse like astrology did after the resurgence of science in the Renaissance.

stanfrommarietta 4 years ago

The problem with these laments about the national debt is that they do not look closely at what the debts consist of and how they are routinely handled by the government.

For example, a large portion of the 'national debt' consists of 'debts' to private and foreign *investors* who have bought US Treasury bonds and securities. This gives rise to the contention that the Chinese are lending money to our government to help pay for its operations. This is false and on a par with the contention that when you take out a CD at a bank the bank is using your money to invest for its own profit and to support its operations, and therefore may not have the money you put into the bank for the CD's to pay you back when the CD's mature. Commercial and savings banks don't operate like that. Neither does the Fed. The case of investors buying US Treasuries as a portion of the national debt fails to consider that the securities in this case are time deposits at the Fed and the principal deposited will be there and returned with interest created out of thin air by the Fed when demanded at maturity. Or, as we do with CD's at our own banks, the investor may roll over the securities to continue investing the money. And this could go on forever indefinitely. So, a large part of the so-called national debt is not an unmanageable problem because most of the invested money is still there in the Fed to be returned with small amounts of interest added, and that created out of thin air. The Fed uses the powers Congress has to create money to create the interest. Actually, the Fed may destroy the physical dollars invested to save storage space, recording just the deposit, and then use the record of the deposit to recreate anew the money to return it to the investor.

But the major value to the United States of offering securities and bonds for sale is that they help to control inflation. When Chinese sell goods manufactured in China to Americans buying them at WalMart and Target, etc. they take a lot of dollars out of circulation. What to do with the dollars? If we are doing deficit spending and the money going out of circulation to Chinese dollar accounts helps balance against the new money of deficit spending, then there may be no inflation. (This is the Bush-Cheney method of deficit spending on wars while encouraging imports to avoid inflation.) But if the Chinese turn around and start buying things here, that may upset the balance and add excess money in circulation and likely cause inflation. So, the Chinese don't want to waste their dollars by inflating prices here and they simply invest them in time deposit savings accounts at the Fed, backed by securities, which in this case are acting like bank CD's. Savings stay out of circulation and everything stays in balance--deficit spending against imports.

When Congress appropriates more money to spend than Treasury has collected in taxes, that creates a deficit that the Treasury has to cover. It does this by also issuing and selling securities at public auction. Banks and large financial institutions buy these securities, and this is what leads people to think there is a major debt problem from deficit spending. The Treasury takes the money it got for the securities and spends it right away back into circulation. But then the banks may want to cash in their securities. And the way to do this is to put the securities up for public auction and the Fed will buy them (if there is a recession going on), because it will buy with money created out of thin air. This new money will be added to the banks' reserves at the Federal Reserve Bank. The Fed will take possession of the securities in question. The Fed being a government agency in these transactions is not owed the full value of the securities. The government doesn't owe itself for its securities it has bought back. The Fed gets 6% of the interest on the securities as a transaction fee to fund Fed operations.

Alternatively, the banks may simply want to roll over the debt by going to the Treasury and asking for a swap of new securities for its old mature securities, at new interest and future maturity date. So, this postpones the issue of debt and it can be continued this way indefinitely.

What about the securities the Fed bought from the banks? It has about $2+ Trillion in those. Again what is counted as debt is the simple obligation of the United States to pay the holder the face value of the security at maturity. It is not a debt to a particular holder of the security. The banks have already given up the securities to the government at the Fed in return for the money it got from the Fed for them. The same debt obligation exists for each $1 bill. If you show up at the Treasury with a $1 bill and want its value redeemed, you will get back another $1 bill. So, the securities at the Fed do not represent a particular debt to a particular bank for money lent to the government. Nor is the Fed a 'holder' to be paid for their full value. (That would be like a bank clerk claiming to be paid the value of securities she bought from customers for the bank with bank money).

What the Fed will do with the mature securities it holds is swap them for new securities with new interest and new maturity dates. It will likely wait until there is inflation to be controlled. For then it will sell these new securities to banks to drain money out of their reserves and curtail lending. Lending by private banks also creates new money in the form of debt. And this could contribute to inflation. But the banks' money will be held at the Fed in accounts corresponding to the securities sold to the banks, and it will be there to pay them back on demand plus interest at maturity.

The Fed will buy securities from banks during deflations, (recessions and depressions) using new money created out of thin air. This augments the banks' reserves. However, there is no guarantee that the banks will further lend the new money into the economy. But that is not necessary because by buying the securities they redeem the government's debt to the banks which likely got them from the Treasury for deficit spending. This will free the government of debt to the banks for the deficit spending. And further the deficit spending money will be equivalent in amount to the new money deposited in the banks' reserves for the securities. That means we can regard the deficit spending money as new money injected into the economy. The banks are just back to where they were before they bought the securities (except for other intervening transactions). And instead of buying the securities then, the bank could have lent more against their reserves. And it can still do that now, but it will not add new debt-free money into the economy as is the deficit spending money.

So there is really no national debt problem. Our government is not going to become bankrupt and insolvent, no matter how large the 'debt' is. The debt is under control.

And nowhere are taxpayers going to have to pay off the national debt. (You didn't see any mention of taxpayers paying down the debt up there did you?)

jimeric 4 years ago

You cannot pay off the debt for one simple reason, our money(the current medium of exchange) is debt, its borrowed from the federal reserve to begin with on interest, its a unsolvable problem. Because of central banking, fiat currency, fractional banking, etc. Its against people and their governments. So Obama 10 ten budget deficit reduction plan is a joke. And with the fed still printing at 0% for the QE injections into main stream will one, only raise wall street profits for the 1%, and secondly like Zimbabwae and Weimar Germany we will see hyperinflation! We need the gold standard back!

Kathleen Cochran 4 years agofrom Atlanta, Georgia

It is always interesting to see America through non-American eyes. The numbers don't lie. And with political bias removed, there is plenty of blame to go around. Looking at what Clinton did, debt is not an unsolvable problem. We have been so easily distracted and so much damage has been done. You have to wonder if we have the will to return to reasonable policies.

bart 4 years ago

Just ran in to this article, searching for some historic reference about our national debts. Thanks, for putting it together.

It looks to me when, debts are climbing, it is not so good living!

when their stable, there is prosperity.

Simple mindedly, was just looking at the time and doublings of debts. Dollars are what they are, just numbers!

Surfgeezer 4 years ago

What a great article. My compliments on showing some history and facts. As I write, we have once again failed at getting any agreement from the two parties on any plan for getting debt under control.

The greatest thing about your article is it shows both our nations changing views on debt and real consequences. Hopefully people will begin to understand that is almost never about the AMOUNT of debt but rather, and far more important, the RETURN on the debt.

Governments operate far more like a business in that respect. As long as the investments generate more returns than the interest cost it is a winning solution. Secondly, because of the math of compounding, it is GOOD to have debt that increases the yield spread (defined as additional revenue over Interest costs). Debt gets paid off, revenue streams continue far past the payoff debt. The purchase of Alaska or Louisiana and or the debt for the interstates being prime examples.

What it did lack was important. I do know how complicated the subject is and agree the line had to be drawn somewhere. I encourage people to do further research on the Federal Reserve. Specifically because of the fact our founding fathers had experience only with England and it's bank (because it was the Reserve currency and what Reserve currency means), and WHY they had such dim views of banking. There is much disingenuous claims about the Fed, usually political. They are VERY germane to the subject of debt. Unless one can understand why we went to a flexible money supply AND flexible relative values of currency to other countries, there is little use of talking about debt. They did base their views on Adam Smith, and he believed in both free markets and a regulated banking system.

The second hugely important subject not covered and also germane is how currency values are now in flux throughout the world. This causes trepidation to people who do not understand that allowing markets to evaluate relative currency values IS free market pricing at it's best.

If you do not understand that in today's world currency values between countries are much like hourly wages in a local economy you will have no clue on how to evaluate debt.

Precisely why we must change the conversation away from how much debt, to getting the best return on the debt. It makes little difference if the debt was caused by targeted tax breaks or spending programs. What matters is how the debt BOTH parties created helped the US to compete in an increasingly competitive world, and wring out the things that do not help us compete.

Kathleen Cochran 4 years agofrom Atlanta, Georgia

People talk about simply doing the math when it comes to Obamacare. But they forget about the math that got us here:

“It took the national debt two hundred years to reach $1 trillion. Supply Side Economics quadrupled the national debt to over $4 trillion in twelve years (1980-1992) under the Republicans. Bill Clinton actually paid down the national debt. How did he do it? He raised taxes. It produced the longest sustained economic expansion in U.S. History” -- ED SCHULTZ, Straight Talk from the Heartland

That is a great submit! I such as this topic. This web web site has a lot of advantage! I located many fascinating details from this web site. It'll support me in many methods. Thanks for submitting this once more.

Immartin - I plead innocent. I had no intention of sounding aggressive or rude; overly concerned about US debt perhaps. The quotes about "your" was simply to call your attention that it was yours. I greatly appreciate your extensive reply. And, yes, I will need to study when Keynes replaced Smith in the financial hierarchy and who was responsible.

I have no problem with debt per se. Only the expectation that it may be paid down sometime in the distant future. i.e. Household debt is justifiable when there is every expectation that the debt will be paid off in the borrower's lifetime. Government debt is troublesome because no ones if it will ever be paid down. My problem is that there is insufficient concern over our current debt crisis. Even as one "too big to fail" business; one city after another; one country after another - are failing. I see no end to the current dilemna.

The good news is that I have reached the age where it will not affect me.

The bad news is that I have reached the age where I may not know - what happens next!!!

Author

lmmartin 5 years agofrom Alberta and Florida

Hi Urbisoler: It was in the 1930's that Keynesian economics was first applied as a solution to the financial depression of the times: when it was first assumed that the government can and should attempt to affect the economy. Granted, at first it was a half-hearted attempt that bore little fruit. You can read more in the article above and there are some links that may help. Since then, the idea that the government can and should direct the economy seems to be accepted as cast in stone -- even by those who favored supply-side and "trickle-down" approaches.

But government attempts at managing the economy tend to fail and often make things worse. Why? Because by the time a problem is recognized it is often in the process of self-regulating -- though that fact is overlooked -- and government intervention (notoriously slow and ponderous) brings about unforeseen consequences which often exacerbates the normal ebbs and flows. Not to mention these well-intended but often catastrophic attempts are very costly. There's a wealth of information out there on this issue, so don't rely on my quick explanation.

At any rate, that is why I see the real problems we face today as having their roots in the '30's. And why did it take another 30 years? Follow the money! During the post WWII economic boom, there was no need to intervene financially. Add to this an almost constant state of war, which at one time when the country did its own manufacturing, actually stimulated the economy. Indeed, many of our lawmakers of that time actually said a state of war was something to be desired. However, times changed. Not only did war become more expensive, supplies had to be purchased outside of the economy. Further, the true costs of recent wars didn't even get booked, but the money got spent all the same. So, in summary, you could just say it was gross mismanagement that began in the thirties that snowballed over time.

The debt of this country is indeed directly tied into history -- all history. Never have I suggested today's debt is an accumulation since the beginning of the nation, but that it has always reflected the politics and decisions of it's time. In the very beginning, the debt carried by the infant nation was as formidable as today's is to us. Think about that. Only once has there ever been NO debt. Once. Don't you find that interesting?

Now a question for you: why are you so aggressive? Why the quotations around "your" quote? Why demand "specific source material" to "justify" my statement? I merely offered an opinion - just an opinion, one based on years of reading, research and thought. I needn't justify anything. If you disagree, do your own research and thought, write a rebuttal and invite me to read and comment. Don't start telling me what you need and making demands. That's rude.

As I've previously stated, this article is not meant to be encyclopedic (in nature but merely a tool to encourage people to research the points and history merely touched on here and learn more.

Author

lmmartin 5 years agofrom Alberta and Florida

Thanks for the links JohnfromCleveland. I don't have time right now, but will get back to you at some point.

urbisoler 5 years ago

"Okay. I believe the real problems started in the 1930's , when govt decided debt was not a priority to be actually paid but a revolving credit. And I don't take my numbers from wiki, but from the US Treasury itself. All the info is free. Also, one needs to calculate in increase in population, not to mention that there is no allowance for inflation."

Immartin: I would like for you to expand on "your" quote above. I need specific source material to justify your statement. Does it, perhaps, include US retreat from the gold standard (1933)? And if, as you state, the real problems began in the '30's, why did it take another 30 years for it manifest itself as accelerating debt?

Author

lmmartin 5 years agofrom Alberta and Florida

I tried to "check up" on your work, however there is none on this site, nor have you left a link to any other site -- which makes it rather difficult, don't you think?

Thank you for taking the time to read and comment and for this basic explanation of money. As to reading up on modern monetary theory, etc it may interest you to know I have done so for many years and hold a degree in finance, economics and business administration. In order to reach a broad audience, I choose to write on the subject in the simplest of terms -- as you have also done here in this comment.

I do understand the fiat system and believe it to be the source of our current problems. Contrary to what you've written here, the government does NOT print its own money but has abdicated that right to the Federal Reserve Bank (a private, for profit banking system.) IF the government was to issue the currency (as it has a few times in the past) then we could escape the corresponding indebtedness each dollar represents.

If, as you so blithely suggest here, the government was to issue an infinity of dollars, all that would happen is a degradation in the value of each dollar -- commonly called inflation.

Actually, John, because the government can not simply print up money, T-Bills are issued to cover the indebtedness. Are you suggesting they do not represent a liability due their holders? That the government does not have an obligation to reimburse those holding the bonds?

You forget a dollar is merely a form of IOU and holds no value of its own. Every dollar in circulation represents an indebtedness.

And yes, there is every comparison between a household budget and that of a government when it comes to expenditures: spending more than your income represents future indebtedness. And future problems.

Much as I appreciate your comment, it seems to me that you are so enamored with the buzz words of finance that common sense has flown over your head.

John 5 years agofrom Cleveland, OH

lmmartin, I am glad to hear that you do not live in fear. And here is why you should not: The "national debt" is not a debt in the normal sense of the word. It, in fact, far more accurate to call it the "national pile of saved dollars."

The U.S. dollar, as you know, is a fiat currency. The U.S. government creates the dollars and spends them into creation. It does not need to "borrow" dollars from anybody, as it is perfectly capable of printing/creating them on its own. It can, if need be, create an infinite number of dollars.

U.S. Treasuries are issued, by law, in the same amount as newly created dollars (deficit spending) - the law is a relic of the gold standard days, when dollar creation was restricted by our gold holdings. These days, treasuries are mainly a safe parking place for excess dollars, and are used by the government to control the interbank interest rate. They are not used to raise money.

The best analogy I can give you is that of a normal bank. If you have more money in your checking account than you need at the moment, you will likely put that money in an interest-bearing account, like a Certificate of Deposit account. When you do this, the bank marks down your checking account by $1000, and marks up your deposit account by $1000. You are in the same financial postition as before - so is the bank. When your CD matures, the bank will mark down your deposit account by $1000 and mark up your checking account by, say, $1010. But we don't say that the bank is $1000 in debt just because you moved $1000 from checking to a deposit account, do we? So it is terribly misleading to say that the U.S. government is "in debt" when people have merely exchanged dollars for t-bills.

The dollars used to purchase t-bills? That is simply savings. People's/banks'/business'/countries' excess dollars, moved from (usually) reserve accounts at the Fed to an interest-bearing savings account at the Fed.

I invite you to check my work, or simply read up on Modern Monetary Theory, chartalism, and reserve banking. It will be worth your while. :)

BTW - there is no comparison between a household budget and that of a country with fiat money. Unless that household can print up it's own money.

Author

lmmartin 5 years agofrom Alberta and Florida

I don't believe in "doomsday," nor do I believe the world will end when our financial excesses catch up with us. The sun will still rise in the morning and life will go on. Truthfully, the debt is only numbers. One day someone wise will say "Enough!" and the reign of numbers will fall.

Civil war? or revolution? Maybe. It's happened before so can happen again. And I think police forces have always had gas masks. Perhaps they just needed new ones. Be careful what conclusions you reach regarding conspiracy theories.

I will not live in fear. Life is too short for that.

As to budget problems, of course the answer is to increase revenues and decrease expenditures -- just the same as your household budget, BUT when our lawmakers have to be more concerned with reelection than in governing, which among them will have the purity of purpose to do the unpopular?

Thanks jcales for your comment.

jcales 5 years ago

I believe we are at $65,000 per capita now. Let's remove 100 million people and it is larger than that. The doomsday people say it will get very bad. Some Youtube videos are predicting civil war, why did local law enforcement order military gas mask, etc. Yes, the conspiracy rises. There is always a fear mongerer in the crowd. I look at it objectively. Back to the budget, so we must obviously raise taxes & cut spending yet I don't hear this enough from the candidates b/c the economy is do bad. You can't necessarily pay higher taxes if you are making money. A real predicament no doubt.

Author

lmmartin 5 years agofrom Alberta and Florida

As I have said a hundred times already, the numbers come from the US Treasury and I don't think there's a better source. Jefferson, if he reduced the debt, it is all reflected in the official numbers of the time.

And as this article was written as Obama took office, they reflect the numbers at that date. Although I have been working on an update, I have not had the time or circumstance to finish the project. Why don't you do it? As apparently you have the superior skills to do so.

Thanks for dropping by even though you weren't balanced enough to give credit for what has already been done. (Why is that? Why can't you acknowledge the work done here? Not like it was a light project or anything.....)

Where is the Obama update? The per capita debt it up to nearly $51,083.66 and it is still his first term.

BTW, not a Bush apologist or lover (couldn't stand his policies either) but just looking for balance.

Author

lmmartin 5 years agofrom Alberta and Florida

Okay. I believe the real problems started in the 1930's , when govt decided debt was not a priority to be actually paid but a revolving credit. And I don't take my numbers from wiki, but from the US Treasury itself. All the info is free. Also, one needs to calculate in increase in population, not to mention that there is no allowance for inflation.

If you can open this graph you can see the debt from 1940 - 2009. The numbers are considerably worse from 2009-2012. You can also project the graph line back from 1940 to 1776 without significant difference essentially supporting my claim that our unsustainable problems begin in the 1960's decade.

Author

lmmartin 5 years agofrom Alberta and Florida

No, David, I don't know you other than you have set yourself up as an independent candidate for President of the United States, at least according to your websites. See, I did take a peek. Still say your comment does not make sense -- grammatically, that is! As for politics and economics -- puhlease! I am quite content to be unworthy of your so-called facts. Thanks for the chuckles, all the same.

Oh -- may I suggest a copy of "Writing: Grammar, Usage and Style" might come in handy?

David George DeLancey 5 years ago

Thank You for insulting me. By the way you can read more of my messages by just searching my name in full. It appears that your oblivious remark is not so much of my words used but how they were used politically and economically.

Usually if one cannot understand something they would essentially observe it once again. Do you really know me, this is the question here. If you do not know me and wish not to know me, the best thing is to leave well enough alone before you appear unworthy of certain facts. Till Next Time.

12:49 P.M. E.S.T. 7/18/2012 This post is in regards to Immartin

Author

lmmartin 5 years agofrom Alberta and Florida

Hello sportinlife. Usury in general usage is the charging of exorbitant rates of interest for the use of capital. Today, public works programs pay more for the cost of financing than for the actual labor and materials -- so taking that in context, is it any wonder we are in such debt? Any wonder towns, cities, counties (and soon to be states) have been brought to their financial knees?

Thank you Gimpy for your thought-provoking comments. I am well aware that much of the expenditure conveniently attributed to the Obama administration were, in fact generated by that led by GW. However, as governments do not operate under an accrual financial system but by a cash one, I continued to report on debt as it was reported. I also understand that much of the debt increase is not due to spending by the current admin but to interest on previous borrowing -- compounded interest, if you will. Thank you for your comment.

hello urbisoler -- Sorry if I overlooked your points (major and minor) but it is sometimes difficult to respond to everyone and everything. Nothing personal, just happenstance. We are all entitled to our opinions and free to express them so I am pleased you took the time to do so here. However, the numbers do not seem to support your hypothesis. Why don't you write a hub arguing your point of view?

urbisoler 5 years ago

immartin - I had hoped you would have responded to my major point (and not to Armegeddon). That point being that it did NOT take 233 years of debt accumulation to reach this point in time. It only took 45+ years. That is from 1965 roughly. That is when the sky began to fall. We were relatively solvent from the beginning until WWII after which we regained solvency.

Gimpy10 5 years ago

Oh one more thing, that would mean that on September 30, 2009 the ND was at 11,909,829,003,511.75. I know that it isn't much but it does make a bit of difference to how much the debt has risen under Obama's admin. and adds a bit more onto Bush's tally. The number I provided is also from the history of the ND page of the Treasury department. What I'm now trying to figure is how much money was put onto the debt that is directly linked to Obama and not to prior expenditures such as interest on the borrowed money for the wars in which he actually doesn't have much control since that milk was spilled before he arrived.

Gimpy10 5 years ago

The only problem with this post is near the end. The FY or fiscal year is from October 1, through to the next year, ending September 30. The government went to a FY instead of a traditional calendar year about 40 years ago. You attribute only FY2008 to Bush when he actually also signed FY2009 on Feb 3 or 4, 2008. He is also responsible for 2009 as well and many of his policies have continued to impact the ND until this day. His wars and the interest that they incur are not Obama's debt, just his cross to bear just like the stimulus is not probably something that he would have implemented if there would not have been a recession. Also remember that when he gave stimulus money it was also like getting some of our taxes back, so what exactly is the TP'ers griping about? That they had to support some of the poorer in our nation. Too bad that's what being an advanced civilized nation is about. If they want to know what has made our country great in the past is that we are a nation that used to care about our neighbors and not just a savage "I have mine go get your own," caveman society. What galls me more than anything is that the ones that could afford to be more generous are now the most greedy among us. Before any ding dong want's to pipe up with the stereotypical, "oh all Liberals hate wealthy people," please note I have the word greed. There is a very vast difference between wealth and greed.

sportinlife 5 years ago

Usury is the process of getting something for nothing. If it is controlled - read limited or eliminated - natural increases in productivity of desired products happens naturally through trade without inordinate profit for one party. A democratically-elected government is the least worst way to institute a sustainable economy.

Author

lmmartin 5 years agofrom Alberta and Florida

David: Your comment makes absolutely no sense. Sheer gobbledygook. Why would I do a search for information on anyone who slaughters the English language like this? I thought of denying this comment as spam, but then thought I'd leave it as entertainment for the next reader. Are you truly this illiterate or are you being deliberately obnoxious and obtuse in your spam; are you so pompous your words are rendered unintelligable or are you just plain stupid?

DavidGDeLancey 5 years ago

The want. Can we consider this term "we" when there is the want of a society to succeed. The basic tooling power is a national currency. This must be fitted with the whole of a society. In the United States we can actually notice the society for it is yes here, but what about it. Yes we now may have the option to take control of an authority, but yet by now as in recognition of an authority it is in respect to notice something about it. The biggest concern is security. How are we secure to be in recognition with each other. A secured society is an economic status. Are we as citizens involved to acknowledge this profile, or are the substantial citizenship of the country just profiling it. Search: David George Delancey and My Five Issue Plan. Justice needs to be claimed as well as Art Economics History. What do you want to leave behind as a secured source of acknowledgeable activity. A representative of the United States of America a fair economy. 3:39 P.M. E.S.T. 7/8/2012

Author

lmmartin 5 years agofrom Alberta and Florida

All quotations used are common knowledge, QUITE FAMOUS AND VERY WELL KNOWN and easily found by a simple search. (Unless you're too damn lazy to do so.) Only an idiot would "make up" quotations in this day and age when such things are easily verified -- and I am not an idiot.

This is not a scholarly, encyclopedic piece of reference material. It is meant to provide basic information, hopefully to stimulate thought and encourage interested parties to do their own research and learn more.

You need not be quite so rude, fella. Nor so commanding. (!) You write your articles as you wish and leave me (and others) to our own methods.

Zack 5 years ago

Wow this would be really good... only trouble is, no source is given for the quotations of these famous people, which means the quotes are unsubstantiated and valueless. Did you make them up? Who knows! Cite your sources! We can make dead people say anything we want if we don't cite a source.

Author

lmmartin 5 years agofrom Alberta and Florida

Hi Sudza -- I think you should be the one to write about the economics of your own country and I look forward to reading it.

TO EVERYONE: as I've said numerous times, I DO understand that Congress spends and Presidential power is limited. I only used Presidential terms as a handy division of historical time. T

Hi guitarforlife, thanks for commenting. Everyone has an opinion on how things got the way they are, and there is much finger-pointing and blame to go 'round. However, in my opinion, far too much money is spent on the whole military/industrial (which is now not even domestic) operation. As to what is generally referred to by that ugly term "entitlements," only a nation run by idiots would believe govt's first imperative should not be a strong, healthy and well-educated citizenry, for history shows that as the "masses" fare, so does the nation. What makes up a nation, anyway? Unhappily, humanity as a whole is a slow learner, doomed to follow the same path over and over and over. Your opinion is respectfully accepted, though I may not be in total agreement with your priorities.

Hi TexasJack: I may never get over the shock of having someone with Texas in their name agree with me rather than dub me a left-leaning, socialist, commie, ill-informed and, worst of all, Canadian idiot. (For the record, the only label in this list anywhere near truth is Canadian.) Personally, I think America's biggest problem today is ideology which has taken the place of rational thought.

Thank you Laurel.

Sgt. Britt, Thank you very much.

Hi Urbisoler, Greed is the root of man's evil and greed is what leads to wars. And what leads to the rise and fall of nations we can learn from history: The more wealth and power fall into fewer and fewer hands, the weaker grow the middle classes and the poor. As goes the common man, so goes the nation. As mentioned above, we've lived the same stupid story ad nauseum and will probably do so to our demise. Does it have to be so? You same to think yes. I am not so pessimistic -- though I find damn little fuel to my optimism.

Hi John Doe, this was published December 12, 2009.

John Doe 5 years ago

I am using this as a resource for an american citizenship project and need to know the date of publification please.

urbisoler 5 years ago

Economics is not my strong suit. When I look at the numbers via graphs I note that, except for a WWII blip, the national debt was under more or less even keel until the mid-60's. That's when it took off at an accelerating rate which does not seem to respond to any known economic measure of control. It is as if it has a life of its own and no manmade remedy can stop it. I explain it thus: It is in the nature of man to accrue more. Always more. Businesses, nations and states function the same way. When they get too big, they lack oversight due to a psychological security that they are indestructible. And power is controlled at the top of a hierarchy. A lack of oversight and accountability will eventually lead to corruption and fraud and a breakdown of the structure at all levels of society. This will lead to uprisings similar in nature to the Wall Street Protesters on the left and the Tea Party on the right. Please understand that this is a NATURAL sequence of events and is a product of the nature of man. Of course, chaos is the result leading to war which is how mankind has always resolved his insolveable problems when nothing else works. Hence, the rise and fall of nations. The only problem is that we now have weapons of mass destruction. War "might" mean the death of millions if not billions. Unacceptable you say? Nature has given us the Four Horsemen of the Apocalypse. Man has given us WMD. Man IS part of nature. They appear to be working in unison as nature intended. How else do we control a finite planet of an expanding 7 billion member population? Just thinking out loud, folks.

Author

lmmartin 5 years agofrom Alberta and Florida

Gee, I just spent fifteen minutes formulating exquisitly intelligent, succinct and eloquent responses to all these new comments and for some reason, it didn't post and is not lost to posterity forever. Now I'll have to redo it when I have a little more time as I have to get to work.

Sorry, folks. Back at ya, soon.

Ray 5 years ago

You have written a wonderful, insightful, and helpful article so that many, many people will or should benefit from your exhaustive research pertaining to the National Debt. Much of what you have stated, is what I expected in the first place.

You may be Canadian by citizenry, but you have the intelligence and the where-for-all to be an international writer, researcher -- one that I will follow in the future. A very informative piece of writing.

Sgt Raymond L. Britt,USMC

OAMAAM

Laurel 5 years ago

Thank you so much to whoever wrote this! It was very informative. I can't imagine the work that went into acquiring this detail. Thanks!

TexasJackVermilion 5 years ago

Thank You So Much lmmartin for this comment :)

"This isn't about Republican v Democrat!! Or who is President -- don't you get it?"

Only in terms of War does a President have some political sway in the country. There are subtle ways to start wars and these are NOT as "Guitarforlife" says Bush Wars. Having said that our Defense Budget is extremely to high and we were warned by Ike about this.

TexasJackVermilion 5 years ago

If you like what Immartin did here check out the link below. All the direct links to the Official Government Web Sites and numbers published here in charts and graphs are supported by the Fed Government Links to left or near the chart and graphs.

Interesting article. A few things that should be pointed out are, that it is Congress, not the president who is in charge of spending. A president can only propose spending or spending cuts. As far as who's fault the debt is, there's plenty of blame to go around, but the Democrats are sometimes willing to lower taxes but never willing to reduce spending. The Republicans want to lower taxes but sometimes are willing to increase spending. We need to reduce spending, even if we were to tax the rich 100% we wouldn't balance the budget. The only way to get out of this mess is to grow the economy. Taxing the rich more won't help the economy.

Another thing I would like to point out is that many of the biggest expenditures of the federal government are welfare and entitlement programs that were put in place during The Great Society in the Lyndon Johnson (Democrat)administration. Which wasn't even mentioned in your article. Also education is a major expenditure, the Department of Education was created by Jimmy Carter (Democrat). Public employee pensions are another huge expenditure of the federal government.

Many people would just like to blame the Bush wars, whether you agree or not with them, and he did spend too much, they are not the cause of the deficits.

Sudza 5 years ago

Hi Lynda. Your topic and research is much appreciated.

I am more distant than you to the US but remain curious.

I have lived in Northern Rhodesia and Zambia, Southern Rhodesia and Zimbabwe and the pre and post South Africa. I now live in the pre New Zealand.

You would enjoy and enlighten many if you did a study on the Rhodesian/Zimbabwean currency and economic history.

There was a time when ordinary Zimbabweans 'bought and sold' on a daily basis, in Millions, Billions and Trillions of $. They know that a Trillion means, robbery. In fact I have 480 Trillion $ so understand that money is not the real measure of the value of living.

This little country (know as the breadbasket of Africa during the cold war) has played the world at its own game both as Rhodesia and Zimbabwe. Sadly its people have suffered from the same manipulation US and other people do. A study will reveal many interesting facts and who the players were and are. It may just reveal a solution as they are far ahead of the rest of the world in their financial history.

The US is very rich in beauty, people, ingenuity, resources and ability and can feed them selves. They certainly don't need pieces of paper to prove it or convert their productivity into.

In spite of the sadness and pillage of Zimbabwe many simple people have survived and enjoyed simple happiness, yes without toilet paper and bread. They won't understand what fast food means, unless it means something that grows quickly or takeaway, which may be interpreted as what government officials or police do.

Enjoy and lets hope we can wrestle back, in love, the life of our wonderful home, Earth

Author

lmmartin 5 years agofrom Alberta and Florida

Thanks for commenting louramano. That's how it appears to me as well, though I admit I have no in depth knowledge of the make-up of congress of each President.

louromano 5 years ago

You're absolutely correct. Despite the common misperceptions, Republicans have been the profligate ones, and the Democrats the fiscally responsible ones.

Author

lmmartin 6 years agofrom Alberta and Florida

Okay. No arguments. This article is not intended to be a political statement, simply what happened, when. Thanks for the comment.

Shabone 6 years ago

The national debt under Clinton increased almost $2 trillion.

Much less than Bushie, but I still cannot fathom how anyone can claim a "Clinton Surplus."

Conversely, the "Clinton Surplus" / skyrocketing debt can also be attributted to Newt Gingrich and the Republican controlled congress.

Author

lmmartin 6 years agofrom Alberta and Florida

Thank you Mtbailz. I totally agree. It seems we can't even study a problem without some prejudiced view interfering, usually with nothing more thought provoking than a regurgitated bumper sticker. I hope this is non-partisan; I certainly strove for it to be so. If someone were to ask my actual political stand, I guess I'd have to say a conservative liberal. Thanks for the nice comment. Very gratifying. I shall soon post the continuation of the Obama years -- a large undertaking. Lynda

Mtbailz 6 years ago

Immartin,

This was splendid. With so much vicious debate about the national debt, it was nice to escape the torment and read the actual history of it without having to hear the biast nonsense. History is wonderful for shedding light on current situations and you did it with such elegance and insightfulness. I will be reading more of your hubs!

Author

lmmartin 6 years agofrom Alberta and Florida

Thanks Gyab. More is coming!

Gyab Morin 6 years ago

thanks for this article , lets hope more will come to teach us

Author

lmmartin 6 years agofrom Alberta and Florida

Thanks Steve. Certainly, spending to try and get out of the mess will not work, but neither is NO spending a possibility. It's unlikely that we can cut our way out of the mess either. What to do? What to do? Lynda

Steve 6 years ago

great article... I think you nailed it with the Clinton era. Even tho Clinton was able to balance the budget and pay off annual deficits the principle still grows because it's a substantial amount. Unfortuately, the world will find out that spending to try to get out of this mess will not work.

Author

lmmartin 6 years agofrom Alberta and Florida

Thank you, jimcrowthers. I hope you'll come back for the timeline of the Obama years of the national debt, once published. Lynda

jimcrowthers 6 years agofrom Port Charlotte

Fantastic article. What a great read, and very well spoken. Voted up and useful.

Author

lmmartin 6 years agofrom Alberta and Florida

Thanks JRH -- Though I hope you don't mean the article was full of misinformation... It isn't. Lynda

JRH 6 years ago

With so much misinformation I really appreciate such a thoughtful and well researched article. Thanks.

Author

lmmartin 6 years agofrom Alberta and Florida

You're welcome.

Laura Deibel 6 years agofrom Aurora

Wonder ans well researched hub, thanks!

Author

lmmartin 6 years agofrom Alberta and Florida

As stated many times over, all information on the levels of debt for each year came from the US Treasury Department. The link is up there.

beth 6 years ago

For example, where did you find the exact debt between 1803 and 1850?

beth 6 years ago

where are your resources? where did you find this information?

Author

lmmartin 6 years agofrom Alberta and Florida

Hi Robert: Yes, as I've commented often here, it seems noone can spend like a Republican.

Hi Richard: How about you just accept this as it is? If you want it otherwise, go write your own.

Thanks to both for commenting. Lynda

Richard 6 years ago

How about reporting cost per capita in terms of something reasonably unchanging in purchasing power over long periods of time such as ounces of gold or hours of labor at median wage?

robert 6 years ago

I keep telling my republican aquintances that it was the republicans that put the majority of the national debt on the United States. I'm so proud to be a democrat and I just wonder how any republican would want to identify themselves as such. As the republicans say, we're for the rich and phooey on anybody else. Democrats in 2012 or this country of ours is doomed forever.

Author

lmmartin 6 years agofrom Alberta and Florida

IT is the nation who has pledged to pay these debts, not the generation currently living, past, future nor any other.

spdarkstar 6 years agofrom Benijofar, Alicante, Spain

I am not Responsible for the debts of my father.

So why are we paying off the debts of previous generations?

Ponder

Author

lmmartin 6 years agofrom Alberta and Florida

Thank you for the link GM Roper. Although I wrote this almost two years ago and haven't added an addendum to cover late events (which would require a book...) I've noticed a real surge in readership of late. Perhaps people are trying to understand and make sense of what is happening around them. If this helps, great. I'm pleased.

One thing of note, this is not the first, nor likely to be the last "great crisis" in American economics. So maybe we should stop screaming the sky is falling and take comfort in that fact.

This whipping up of public panic is certainly not helping, not leading us to sit quietly and find a solution -- if there is one. Which I doubt.

GM Roper 6 years ago

What a great article. Informative and very well researched, but one which leaves me with the feeling that those elected to Congress (and the presidency) haven't got a clue as how to resolve this problem. I'm linking to this in my blog and on facebook.

Immartin, you have done a yeoman's work in putting this together and I thank you.

Author

lmmartin 6 years agofrom Alberta and Florida

Thank you WesternHistory. It amazes me how few people truly understand what is going on. Such as: all over the world the bankers have unloaded their bad debt on the government (i.e. the people) and nowhere as successfully as the US where we borrowed money at 3.0% interest to loan to banks at less than 1/4% and then the banks used the funds to buy up treasury bonds at 3.5%. So not only have we assumed the bad debt, we are now paying 6.5% for the honor. Whoo-ee! Nice swindle. And we blame Social Security for the problem?

Thanks for commenting here. Lynda

WesternHistory 6 years agofrom California

Very good informative hub. The problem today is that the media puts out a lot of misinformation about the debt and most talking heads have a political agenda attached to their commentary. Unless people take the time to study the issue thoroughly they are at the mercy of what particular spin the media puts on it. This is a good hub for people who really want to learn about the debt in something other than a soundbite.

Author

lmmartin 6 years agofrom Alberta and Florida

Thank you DAve Bottoms. I often think I should add an addendum to this hub as so much history has passed since I first posted it -- none of it good.

Dave Bottoms 6 years ago

This piece describes our sad story wonderfully, and I've once again forwarded it around, with the admonition that no -- it ain't fun reading, but yes -- it should be required reading.

No reason. I used presidency just to measure history, not as an indictment of either party. Perhaps that would make a second hub, sister to this one. I'll think on it. Thanks. Lynda

Dano 6 years ago

I noticed you did not mention the make up of Congress under each President. Is there a reason for your omission. It would help to understand the overall picture.

Author

lmmartin 6 years agofrom Alberta and Florida

"Sorry about my English, but I still feel the necessity to express my thoughts." - this is your right. Do not apologize. Many countries of this world have the same freedoms. I was born in the UK and grew up in Canada, countries equally free. But you are right -- it is a chain reaction. One country buys up the other country's debt -- all worthless -- like a giant check kiting scheme. But who actually holds the end card? The financiers, the uber-wealthy. And we work to make them wealthier. Right now, the majority of the US national debt is held by intra-governmental accounts, due to the raping of the trust funds. That's right. The funds paid in by working Americans have been taken and spent, and now they are paying it back again, though in the interim it has been decided it is too expensive to pay them the funds they paid into, like Social Security. Indeed, the common idea that the majority of the debt is held by foreign governments is wrong. See my hub -- Who are America's creditors for more information.

It must collapse. There's no other way out. The numbers that represent the debt in the world far outstrip the world's assets. The entire world is bankrupt -- but what does that mean, really? We pay interest on the debt through taxation, taking money from working people and putting into the pockets of the wealthy. It doesn't take a genius to figure it all out, but apparently you are a communist or otherwise suspect when you do.

I am neither left nor right, but a realist. Palin is an idiot, even less able to run a country than my grandkids. Obama lost control because he didn't understand the country is run by the giant oligarchy that rules most of the world. This is what I see.

If you read the comments above, you will see a lot of rants about Republican versus Democrat. This is the new opiate of the people and none of it makes a speck of difference. It is the age old idea of divide and conquer. Distract the idiots with games of ideology and they will never see the truth.

Thanks for your comment.

GeorgeBrain 6 years ago

I'm agree with you: one day the debt will be erased and life will continue. Countries from the 3rd world wants the same from USA and the others 1st world countries, they have been paying its debt for centuries. It is a big chain.

America is still free, you can write down your thoughts on a card board an show it out on the street. Many people in the world do not have that right. You can use it.

Now all the guns points Obama, but he is not guilty. The System was built in that way. Every Empire has consumed more than it has produce. Republicans like Palin are not going to do it better.Even when I still do not have the right to vote, I know that Palin is not the solution, all she can do is make things worst.

Sorry about my English, but I still feel the necessity to express my thoughts.

Author

lmmartin 6 years agofrom Alberta and Florida

Of course America will prevail. One day, we'll wake up and realize this debt is just so unreal -- world wide -- and it will never be paid. The sun will still rise; people will go to work (if they have it) and the world will make its necessary adjustments. What does concern me is to see massive cuts to social spending (which is a small slice of the debt pie) and increases to military spending (which is by far the largest slice.) Currently, the US spends more on military than the next 27 military powers put together, 22 of which are allies. Let's reread the words of Dwight Eisenhower, a military man himself who saw the future if society was to sacrifice to that particular route. Yes, we will go bankrupt. Yes, the debts of the world will be written off. And yes, life will go on.

But without spending on education, science and new technology, what form will that life take? A feudal empire held by the ultra-wealthy in which the uneducated and ignorant peasants are led by propaganda and the Disneyfied myths that pass for history, or a strong, intelligent population once more self-governing. This is the importance of decisions that are being made now.

Though damn few seem to see it.

GeorgeBrain 6 years agofrom United States

There's no way out. Obama is not a wizard. We spent all the money buying goods from China and around the world. It is weird to hear the Republicans talking about reduce the debt, when Bush spent more money than any one else. I'm agree with Obama, investing in science and technology is the best solution. Promoting the technological development more than any other country will be the way to fix things. You never spent money when you use it to educate your people. I'm not republican, nor democrat, I'm a Cuban guy, and I love America. I hope America will prevail.

Amanda Severn 7 years agofrom UK

Hi Lynda, I've just re-visited this hub which I confess to having forgotten about. Re-reading it now, and looking through the many comments, I can see why I didn't comment last time I looked at it. It's just too immense to contemplate. The question is, how exactly will this whole nightmare end? Debts this huge can never be called in, so they must therefore be somehow written off. There is no way to suck the air back out of a bubble, so the only way forward is to burst it.

Author

lmmartin 7 years agofrom Alberta and Florida

Yes, we would hope so -- doubt it, but wish. Lynda

YJ Draiman 7 years ago

Decisions we make today should result in a sustainable world for many generations into the future. Ensuring that decisions being made about our energy, water, and natural resources are sustainable is central to this belief. This also applies to political, economical and financial decision that affect/obligates current and future generations.

Author

lmmartin 7 years agofrom Alberta and Florida

Thanks ulTrax -- always open to correction -- provided it is based on facts as is yours. The truth is Americans pay less in taxation than any other developed nation, demand miracles of their government and then complain no matter what is done.

And I agree on the irresponsible tax cuts of the Bush administration, who reverted once again to Reagan's trickle down theories. There isn't a scintilla of proof that tax cuts to the higher brackets benefit the lower -- quite the reverse, actually. And now, and in view of Jon Ewall's comment, after listening to a Republican senator's speech on the subject, I understand interest groups wish to return those same tax cuts, while cutting benefits to the lowest brackets, that is those in dire poverty, through food stamp cuts of all things.

But I repeat, this is not a partisan project.

And I also repeat, the situation of today is not limited to the U.S., but is a world-wide problem. See my hub, Hey Big Spender on world debt levels.

Untrue. You are referring to the UNIFIED budget which includes borrowing from various off-budget trust funds like Social Security to meet on-budget expenses. To see the TRUE surplus you need to look at ON-BUDGET surplus

In FY98 the on-budget deficit was –$29.925 Billion which means the government was still borrowing that amount from internal sources to meet expenses. Only in FY99 do we see the first true on-budget surplus of $1.9 billion followed in FY00 with a surplus of $86.422 billion. And then it was gone... and while Bush ran in 2000 on protecting the Clinton surplus to strengthen Social Security, he passed round after round of irresponsible tax cuts.

Author

lmmartin 7 years agofrom Alberta and Florida

Jon, people without income or very low income do not pay taxes -- they don't need tax cuts. Secondly, what is the purpose of this?

Does it change the fact that the American people are in debt to the tune of $156,000 (combining public and private debt) for every man, woman and child? Not that this is particular to the United States -- see my hub Hey Big Spender for world figures.

This isn't about Republican v Democrat!! Or who is President -- don't you get it? It's gone too far to be fixed. The nations of the world need all their tax revenues to pay interest on existing debt, and must borrow again to find the funds to run the nation.

It's all meaningless at this point. It can never be paid. And it isn't just the U.S. This is the big picture and you want to waste your breath deciding which political philosophy works best -- it doesn't matter anymore.

You remind me of the Romans debating governmental decorum as the barbarians broke through the gate .... Or as I said earlier, re-arranging deck chairs on the Titanic.

Wake up.

JON EWALL 7 years agofrom usa

lmmartin

'' tax cuts do not help the poor'' Maybe you can explain what President Barak Obama said in his speech on 9/7/10 ''labor day'',''we gave 95% of the people a tax cut ".IS THAT A TRUE STATEMENT?

Author

lmmartin 7 years agofrom Alberta and Florida

Jon -- tax cuts do not help the poor -- not the legislation currently under discussion. And your views are also respected, however much I may disagree. However, I still cannot help but think your views, partisan as they clearly are, still miss the big picture. Lynda

JON EWALL 7 years agofrom usa

lmmartin

''However we got here,here we are, and today the GOP wants to cut food stamps in order to justify not "laying off" teachers and cops, while at the same time bringing back the tax cuts for the wealthy.''

The GOP wants to cut food stamps, where did you get that information ? The GOP wants to bring tax cuts back for the wealthy, you forgot the Bush tax cuts were for all taxpayers.

The truth of the matter was that the Democrat Bill to pay for teachers union pensions in the public sector some $10 billion of a $26 Billion needed to be deficit neutral. The Democrats proposed cutting food stamps to pay for the bill, check it out. The joke in the matter was that the food stamp cuts would not take effect until 2014, that’s how the Obama administration and the majority Democrat Congress operates, just more hocus pocus and smoke and mirrors.

The GOP has no power to move legislation since the Democrats took over in 2007. To even accuse the GOP of wanting anything except to follow the Constitution and the Laws of the land is to be disingenuous.

I enjoyed your hub and your information, your political opinions are respected for what they are.

Author

lmmartin 7 years agofrom Alberta and Florida

Hello Jon Ewall, Much as I am pleased you read this article, I find your comment tinged with just a touch of aggression, which I don't understand. I find it odd we give our leaders credit or blame for the vagaries of economics, because if there's one thing all economists know, it waxes and wanes of its own accord. I also find it ridiculous to be speaking of tax cuts versus tax credits at a time each American, regardless of age, income or circumstances is responsible for a cumulative public debt of around $50,000 dollars. Add in private debt and this nation's per capita debt rate is around $160,000 -- and still you believe the actions of a bunch of self-serving buffoons in Washington count for anything. The interest on national debt alone eats every tax dollar taken in. We are on the down slide of a catastrophic roller-coaster that has nothing to do with which party did what, and you want to debate tax cuts and credits.

Sir, you need a reality check.

This article is non-partisan, not a political statement, merely a recitation of the highlights of history and the numbers reflecting the national debt -- nothing more.

However we got here,here we are, and today the GOP wants to cut food stamps in order to justify not "laying off" teachers and cops, while at the same time bringing back the tax cuts for the wealthy. A mind set that beggars the imagination.

Your comment just adds to the sense I have of being Alice in Wonderland. You may continue to rearrange deck chairs on the Titanic if you wish.

JON EWALL 7 years agofrom usa

immartin

In 2000 the Republicans with Bush went on a spending spree. Much of the spending occurred because of a slow economy inherited from Clinton, 911, wars in Iraq and Afghanistan. Sounds factual. In 2006 the Republicans lost majority control of Congress.

‘’Bush inherited peace and prosperity,’ Yes he did ,sort of.

‘’gave back 2 wars ‘’ so does that mean 911 had no impact as to why Congress ok’d going to war.

‘’and the Great recession’’ The first 6 years with Bush and the Republicans in 2000 to 2006 ,prosperity with unemployment at 4.6% (Clinton 4.5% ) and highest receipts to the treasury. The last 2 years with Bush and Democrat controlled Congress in 2007 and 2008 a recession started in dec.of 2007.

The Bush tax cuts in 2003 brought us out of a recession, paid for 2 wars and an economic boom up to Dec. 2007.Let me try to explain a tax cut and a tax credit. Which one would you prefer to have, a tax cut or a credit?